Chinese conglomerate becomes biggest shareholder in German lender
Chinese conglomerate HNA Group has raised its stake in Deutsche Bank to 9.9 per cent, in a move that will make it the biggest single investor in the European lender, putting it ahead of US asset manager BlackRock.
Deutsche declined to comment on HNA’s latest stake increase, which comes as the bank is in the middle of a multiyear effort to restore its fortunes after racking up billions of euros of losses in 2015 and 2016.
The lender completed an €8bn capital raising last month — its third since 2013 — and chief executive John Cryan is in the process of trying to simplify Deutsche’s structure and reduce its costs.
HNA ranked number one among Chinese outbound investors so far this year, sealing $5.5bn in deals or about 13 per cent of Chinese overseas deals by value before the latest Deutsche purchase. Last year, it ranked second with 12 per cent, including purchases made through entities it controls, according to Dealogic.
Founded as a two-jet airline based in Hainan Island, the group’s recent acquisitions have turned it into an international financial operator. Holdings include Old Mutual’s US asset management business, New Zealand’s largest non-bank lender and SkyBridge Capital, the hedge fund platform previously owned by American financier Anthony Scaramucci.
Its purchases have accelerated in the past year and a half as Chinese regulators have clamped down on capital outflows, scuppering high-profile deals by rival conglomerates including insurer Anbang and property-to-entertainment group Dalian Wanda. Just under half of the 67 deals HNA has entered since 2008 were conducted since the beginning of 2016, according to Dealogic.
The Chinese conglomerate’s sprawling investments now span hotels, cruise lines, golf clubs, banks and logistics groups, including at least 12 listed companies. It enjoyed $67bn in lines of credit from Chinese banks led by the two state policy banks, China Development Bank and China Ex-Im Bank, as of the end of 2015. Other Chinese banks and securities firms have snapped up the convertible bonds of its listed units.
HNA’s move on Deutsche overtakes BlackRock’s 5.88 per cent stake. The Qatari royal family also owns close to 10 per cent through two separate investment vehicles. When it took its initial stake in February, HNA said it would be a passive investor.
A filing made on Tuesday by entities including C-Quadrat, the Austrian asset manager through which HNA had already purchased a 4.76 per cent stake in Deutsche, showed the Chinese group had purchased an aggregate 204.7m of 2.06bn shares outstanding in the German bank.
A spokesman for C-Quadrat said in February that HNA might buy more shares. However, he said that it did not plan to go over the 10 per cent threshold above which stake purchases must be approved by Germany’s financial watchdog.
Alexander Schuetz, chief executive of C-Quadrat, has been nominated to join Deutsche’s board at the bank’s annual shareholder meeting later this month.
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